Abstract: An analytical study was undertaken with the objectives of studying the concept of financial performance analysis, reviewing the current status of hotel companies in India, identifying the parameters/indicators of financial performance of hotel companies, evaluating financial performance of select hotel chains and analyzing financial statements and assessing the financial performance of select chain of hotel companies. Financial statements of five large hotel companies from India were analyzed for a period of six years. Four of the key performance factors showed much lesser than expected growth to be called as a steady growth. For Operating Revenue, Total Revenue, Gross Margin and EBIDTA the actuals are significantly lower than the expected performance at a CAGR of 10%. However, in case of performance factors like PBT, NP, EPS and Dividend the actual average performance is significantly better than the expected performance at a CAGR of 10%. Both the key parameters taken for financial health, namely, fixed assets and net-worth have shown significantly low actual values than the expected reasonable growth of 10% CAGR to lend some steadiness to the financial health of the Hotels. The industry on an overall basis has not shown a steady performance given the weak CAGRS on Revenue, Gross Margin and EBIDTA. After six years the operating revenue in FY 2018/19 stood at Rs.5004.17 crores from Rs.4560.60 crores in the year 2013/14. Even if we apply a CAGR of 5% the expected revenue by the end of 2018/19 was Rs.6111.64 crores. Market is a problem for the Hotel Industry. At the same time profitability has shown a better performance as compared to the top line. In fact, the year 2018/19 has recorded the highest NPs for all the six years. This is an encouraging sign and it can be expected that the industry will do better in the years to come. This article presents the findings and conclusions from the study.

Keywords: Hotel Management, Performance Measurement, Financial Statement Analyses

PDF | DOI: 10.17148/IARJSET.2019.61104

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